Yes, this is a bold statement, and I understand that it opens me up to investigation by and potential prosecution from the SEC. But after I provide you with the empirical evidence for such a claim, I’m certain that you will agree with it, as well as concur that I have not engaged in any illegal or immoral activity, as to the above assertion.
It all began some 30 years or so ago. I was watching an “Investment Program” on TV. Some commentator was interviewing a small, wizened Frenchman, Ives Gilliard (?) or something like that, who was the manager of a mutual fund named, as I recall, “The SoGen Fund”. The commentator was berating the Frenchman for maintaining a 5% ratio of gold in the fund. He pointed out that gold didn’t return any dividends or interest and was just “dead” money and hurt the return of all the fund holders. The Frenchman looked at him with mild forbearance, such as you would grant to the Village Idiot, and explained his logic. “The gold is my insurance policy. If everything goes to Hell in a hand basket, the value of the gold might rise sufficiently to offset some of the portfolio’s other losses.”
Well, that made sense to me and so that very week I went out and bought a gold coin. As I remember we were in some type of financial fiasco even back then and the price of my gold coin was around $800.00. Well within weeks the price of gold plummeted and finally settled down into the $200.00 range. Keeping faith with Mr. Guillard(?), I held onto that gold coin for 20 or more years.
Again watching the financial pundits on TV, I was finally convinced by one that gold was a terrible investment. It paid no interest or dividends and had not only not gone up in value over the ensuing twenty odd years after having fallen from the ridiculous price of $800.00 an ounce, but I was sitting with a big loss. This last point hurt me personally, as you might appreciate. So I went out and sold my gold coin for around $300.00, took my loss bravely, and used the coin’s selling proceeds to invest in some hot, but safe investment. I can’t recall if I bought Enron or MCI, but that’s not important as both soon went to zero. Which only reinforced my feeling that my gold investment had been a complete and total disaster.
Within just a few short years after my exiting the gold market, the price is now above $1,800.00 an ounce.
You can see my logic. I bought at $800.00 and it went down, and stayed down for decades for as long as I held onto that gold coin. I sold at $300.00 and within a relatively short time it’s up above $1,800.00. Ergo I have this uncanny ability or skill or supernatural power to influence the price of, or at least the direction in which the price of gold moves, by my very action. If I purchase gold, it retreats to the basement level and remains for the duration of my ownership. If I sell gold, it zooms into the stratosphere. Ergo I control the price direction of gold by my personal investment in that barbarous metal.
I’m thinking that I should purchase some gold now as the world’s financial situation seems to be unraveling before our very eyes. Two things can happen, both beneficial. First the price of gold could continue to rise, at which event I’ll make back some of my earlier loss and really feel astute and vindicated. I might even forgive Mr. Elliard(?). The Second possibility is that the price of gold would plummet. This would only confirm my above claim to control of the price direction of that barbarous, but lovely metal. It would obviously harm my personal financial situation, but would probably signal that the crises that are flaming around the world are diminishing and that the panicky flight into gold has abated as the world returns to more normal financial and monetary calm. Yes, my wealth would be gone, but I would be recognized as the benefactor of all mankind.
Well Gold reached the heavenly heights above $1,800.00 and as I listened to the learned advice from MSNBC experts I realized that their expectations of gold reaching $5,000.00 an ounce without me was just not acceptable. So guess what I did?
Gold has plummeted down to below $1,750.00 per ounce from a high of $1,917.00. If you’ve been paying attention, you know what I must have done.
I’m considering a new business venture in light of the above. What would you think of paying a small fee, to be informed of when I buy or sell that glittering seductive metal? (No Shirley, I’m not talking about buying you some gold jewelry. I’m talking about buying the real stuff in bulk. You know, like a full ounce gold coin or gold bar.)
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